Equities can withstand a rise in 10-year yields from "today's low levels, as it reflects a normalization of the interest rate environment," writes Northern Trust's chief investment strategist.

Market uncertainty has risen in recent months over potential reductions in the Federal quantitative easing program—a change that could be described as "quantitative squeezing." This process will likely first involve a reduction in the pace of buying U.S. Treasury and mortgage backed securities well before potential changes in interest rate policy are implemented.

Global central bank policy has become, along with political developments, a key driver of investment returns and thus merits significant investor...